03/11/2016 - 10:36

South32 buys NSW coal assets for $261m

03/11/2016 - 10:36

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Perth-based miner South32 has entered into an agreement to buy the Metropolitan Colliery and a 16.7 per cent stake in the Port Kembla coal terminal in NSW from Peabody Energy Corporation for $US200 million ($A261 million) in cash.

South32 buys NSW coal assets for $261m
South32 chief executive Graham Kerr. Photo: Attila Csaszar

Perth-based miner South32 has entered into an agreement to buy the Metropolitan Colliery and a 16.7 per cent stake in the Port Kembla coal terminal in NSW from Peabody Energy Corporation for $US200 million ($A261 million) in cash.

The BHP Billiton spin-out said today the offer would add about 1.9 million tonnes per annum of saleable metallurgical coal to its production in the area.

The Metropolitan Colliery is an underground coal mining operation located near South32’s Illawarra coal assets, and is owned by an Australian subsidiary of Peabody.

Coal from the mine is transported by train to Port Kembla for shipping.

The mine produced 2 million tonnes of saleable coal last year.

South32 chief executive Graham Kerr said the acquisition was a natural fit for the business.

"The mine's recently upgraded infrastructure and close proximity to Illawarra Metallurgical Coal will enable us to further optimise performance and unlock unique blending and resource synergies," he said.

“We look forward to the Metropolitan team joining South32.”

South32 shares were 1.1 per cent higher to $2.59 each at 10:30am.

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